A Very American Coup By Michael – Louis Ingram, Editor-in-Chief...
The ‘Lay-away’ Mentality Of Davis’ Purchase Reminds Me Of Reggie Fowler’s Failed Attempt
Davis, who played all of one year in the NBA and spent maybe another two years working in the league offices, is banking on former Duke teammate Christian Laettner and his investment team to purchase 70% of the Memphis Grizzlies.
The amount of money they are trying to come up with isnï¿½t a small sum either. Michael Heisley, who originally bought the Grizzlies back in 2000, paid $160 million for the team six years ago and according Forbes.com, the franchise was worth $294 million in 2005.
So what is Davis and Laettner looking to buy? $205.8M is the price Heisley wants. Thatï¿½s not a bad return on an investment. Who wouldnï¿½t want a $45 million return in six years and only being the majority owner at that?
But it looks like Davis and Laettner are trying to pull the wool over the minority ownersï¿½ eyes and the city of Memphis in general. Davis would have to come up with $40 million of the $205 million needed to buy the team and a series of other investors would make up his ï¿½minorityï¿½ ownership group.
To me this smells really rank on Beale Street and it definitely worries the other partners who have a stake in the Grizzlies.
ï¿½We were hopeful,ï¿½ J. R. ï¿½Pittï¿½ Hyde, Jr. said after a meeting in his offices on Friday, ï¿½but they assured us they will get us that information very shortly.ï¿½ Davis, in talking with the Memphis Commercial Appeal, said that everything would come to light shortly when ï¿½we file our stuff with the league.ï¿½ Stuff? What stuff? From where Iï¿½m sitting, Iï¿½m beginning to wonder if they even have the right stuff to purchase this franchise. In other words, Iï¿½m wondering if Davis is worth what he says he is and Iï¿½m wondering if there arenï¿½t any skeletons in the closet that he isnï¿½t telling us as basketball fans.If Iï¿½m sounding really skeptical about this deal right now, youï¿½re right. Iï¿½m skeptical because when it comes to something like this, African Americans donï¿½t really do business in the circles of rich sports owners. Letï¿½s be frank about this new experience in our culture. There is only one African American who has a majority interest in a sports franchise and that is Robert Johnson.
Of course Johnson is also worth $1 billion or so, so he can afford the $300 million price tag of being an owner. It is that lack of having enough African Americans in that financial stratosphere that has me worrying about Davisï¿½s quest.
When it comes to team ownership, you shouldnï¿½t be looking for any minority investors for just a 70% stake in the horse; your investors should be buying the whole dang horse.
And thus I now have some very eerie feelings about whether Davis will be able to run the Grizzlies as majority owner or not. To me, $40 million isnï¿½t enough to give me hope on this deal. Now if he said heï¿½s putting up $150 million of the 70%, Iï¿½d be singing a different tune.
When Reggie Fowler tried to buy the Minnesota Vikings, it became apparent that he didnï¿½t have the finances to be the majority owner. To me that was like going to Wal-Mart and putting a $100 engagement ring on ï¿½lay awayï¿½. Well it looks like Davis is doing the same thing and thatï¿½s just not prudent business sense.
This is not about whether another Black man should be a team owner. This is more about whether Davis is financially worthy of joining that elite club. Right now, Davisï¿½ actions are showing that heï¿½s not ready for the big leagues and that may be hurting him to be an owner.
Davis isnï¿½t buying a real estate property or a car. In such cases a small ï¿½down paymentï¿½ would be necessary. Heï¿½s buying a business worth $294 million in 2005. Both he and Laettner are about $110 million short of being serious contenders right now.
Either he needs to sack up and cough up the extra $110 million or he needs to let the minority group have the team. This isnï¿½t Wal-Mart or Ray Rayï¿½s shoe boutique down on 3rd and Lexington. This is a business venture that needs to be seriously considered and handled as such.